A shopping surge for the tail end of the summer ensured an uptick in activity and a bumper sales growth in August, latest figures from the Office for National Statistics suggest.

But having slashed thousands of jobs in the wake of Chancellor Rachel Reeves' wage and NIC changes which came into effect in April, business leaders remain fearful that any chances of recovery are fragile.

The ONS said: "Retail sales volumes are estimated to have risen by 0.5% in August 2025, following an increase of 0.5% in July 2025 (revised down from a 0.6% rise in our last bulletin)."

Clothing stores, butchers and bakers, and non-store retailing grew during the month, which some retailers attributed to the good weather, the statistic service reported.

Looking at the quantity of goods bought (in volume), retail sales were estimated to have fallen by 0.1% in the three months to August 2025 compared with the three months to May this year, with falls in automotive fuel and computer and telecoms equipment being partly offset by increases in non-store retailing and clothing stores.

The ONS added that falls in other non-food stores, such as second-hand goods retailers (which includes auction houses and antiques dealers) were a factor in the findings, as well as falls in retailers of computers and telecoms equipment.

"Automotive fuel sales also fell. This was partly offset by an increase in non-store retailers (which are mainly online) and clothing stores," the report said.

However, non-food stores (the total of department, clothing, household, and other non-food stores) rose by 1.1% and the rise was across all four sub-sectors, mainly because of increases in second-hand goods (within other non-food) and clothing stores.

"Retailer comments mentioned dry weather as a reason for the increase," said the ONS.

Elsewhere, in food, specialist stores such as butchers and bakers mostly recovered from poor sales in July 2025, with reports of improved footfall. Non-store retailers also increased, making this their seventh consecutive monthly rise.

The Met Office climate summaries reported that the UK experienced below average rainfall, while temperatures were above average across all four nations.

Overall, ONS senior statistician Hannah Finselbach said August had been "a poor period for non-food stores, such as antiques dealers and auction houses as well as tech stores, with fuel sales also falling."

But any digest of the ONS data should be taken with caution, according to the British Retail Consortium, which says that although sales rose 3% in value and 1.2% in volume, the positives may be too little too late.

Dr Kris Hamer, BRC Director of Insight, said: "August closed out a bright summer of retail sales on a high note, with volumes up for the third month in a row. The prolonged sunshine, bank holiday and interest rate cut all helped to boost sales, especially for clothing and books. People are also spending more on their homes, with furniture seeing a boost for another month following a long period of decline."

But he added: "Even if this sales growth continues, it would not be nearly enough to mitigate the mass of costs hammering the industry since last year's Budget. Business confidence remains weak. Earlier this summer, 56% of CFOs described their feelings about trading conditions over the next 12 months as "pessimistic". And, there is little sign of improvement in the run up to Christmas, especially with the Budget falling so close to Black Friday and fears of potential further tax rises."

The government can help improve confidence by ensuring business rates reforms deliver "a meaningful reduction for retailers and that no shop pays more," he said.

"This will allow retailers to invest more in jobs and stores, and most importantly, protecting customers from the increased costs filtering down to them."

Reinforcing concerns from the BRC, Nielsen, as the world's foremost consumer intelligence company, suggests its own barometer is swinging backwards.

Reflecting on a two-point drop in its UK Consumer Confidence index, Neil Bellamy, Consumer Insights Director at GfK, an NIQ Company, said: "There's an autumnal chill in the air this month, with all five measures of consumer confidence down."

He added: "The August 7 decrease in interest rates does not appear to have provided any obvious boost to the financial mood of consumers or drawn attention away from day-to-day cost issues. Both personal finance measures - past and future - are lower, while our major purchases measure has dropped three points to -16.

"Even more striking is an eight-point fall in saving intentions. Looking at the economy, sentiment is sliding sharply: in June 2024 our forward-looking measure stood at -11, but just 15 months later it has slumped to -32."

Perceptions of the past year remain weak too, he said, being down three from last month to -45.

He added:: "With tax rises expected in the November budget, the risk is that confidence inevitably falls, just like the autumn leaves."